After a federal program (Canada Emergency Commercial Rent Assistance, as improved, in Quebec, according to an announcement of Minister Pierre Fitzgibbon this morning) in virtue of which landlords of commercial premises who adhere to the program ultimately absorb an important portion of the gross rent for the months of April, May and June, 2020 of tenants who qualify, the same landlords could now be prohibited, for a limited period, from terminating a commercial lease, even in certain events of default by the tenant.
In the draft « Loi visant la relance de l’économie du Québec et l’atténuation des conséquences de l’état d’urgence sanitaire déclaré le 13 mars 2020 en raison de la pandémie de la COVID-19 » [indeed, that long, the title], which the Quebec goverment hopes to adopt by June 12, 2020, a provision has been inserted stating, essentially, that from the adoption of the Law and until August 1, 2020 (or any other date determined by the government before that date), there can be, in relation to a commercial lease, no termination of the lease, seizure of the goods located in the premises or exercise of an hypothecary right with respect to such goods, as a result of a default to pay the rent stipulated in the lease and which has become payable after March 13, 2020. This provision applies notwithstanding any provision of the lease, but does not prevent the parties from agreeing to the termination.
This provision would apply to all tenants, regardless of their solvency or their activities, and whether or not the tenant has carried on its business in the premises, in whole or in part, profitably or not. But to be clear, termination remains possible for a default to pay rent which became payable before March 13, 2020.
Of course, this provision could be modified before the adoption of the Law. Accordingly, this is a story to be followed.
Important notice : This communication takes into account the information available at 1:00 p.m. Monday, June 8, 2020.
François Nantel
Avocat
Florence Péloquin
Avocate